Abstract
Confusion between operational effectiveness and strategy has led companies to face hypercompetition. Little by little, management tools use to improve productivity have taken the place of strategy. But operational effectiveness (OE) is not strategy. OE means execute a similar activity better than rivals whereas strategy is about doing different activities from rivals or doing similar activities differently. Both are essential for performance, but OE alone is not sufficient. When a company improves its OE, it shifts the productivity frontier outward, but there is a rapid diffusion of best practices and competitors can quickly imitate these techniques.
